Australian spy agency helped BHP negotiate trade deals

By Philip Dorling

November 7, 2013 — 3.00am

BHP was among the companies helped by Australian spy agencies as they negotiated trade deals with Japan, a former Australian Secret Intelligence Service officer says.

A former diplomat has also confirmed Australian intelligence agencies have long targeted Japanese companies. Writing in The Japan Times, Professor Gregory Clark said Australian companies were beneficiaries of intelligence operations.

"In Australia, favoured firms getting spy material on Japanese contract policies and other business negotiations used to joke how [it had] 'fallen off the back of a truck'," Professor Clark wrote.

Business information is a main target for [intelligence] agencies, he said. "The targeting is also highly corrupting since the information can be passed on selectively to co-operative firms - often firms that provide employment and cover for spy operatives."

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"BHP knew we were giving them secret intelligence. They lapped it up."

Professor Clark's observations are supported by a former Australian Secret Intelligence Service officer who said that commercial information became a priority after the global economic turmoil of the 1970s.

"Suddenly [the Australian government] wanted to know what the demand would be for Australian iron ore and other commodities, and just what price the Japanese were prepared to pay for steel," the former intelligence officer said.

"We gave market information [to] major companies like BHP which were helpful to us, and officers at overseas stations would trade snippets with some of their commercial contacts … BHP knew we were giving them secret intelligence. They lapped it up."

The former spy says informal exchanges with business executives were continuing when he retired in the 1990s. More recently, US diplomatic cables obtained by WikiLeaks and published by Fairfax Media in 2011 revealed former BHP Billiton chief executive Marius Kloppers privately offered "to trade confidences" with US officials about China.

''Kloppers has a keen interest in learning everything he can about the Chinese and is not shy about asking us for our impressions,'' US Consul-General Michael Thurston reported to Washington in 2009. BHP declined to comment at the time.

The US and Britain have repeatedly denied charges of economic espionage following the disclosures of US intelligence contractor Edward Snowden. Australia says it is longstanding policy not to comment on intelligence matters.

Australian National University international relations expert Dr Michael McKinley said: ''While most countries might have suspicions … the revelation of economic espionage has the potential to be highly embarrassing."

Professor Clark also highlights the potential for secret intelligence to harm diplomatic relations.

After leaving the Australian foreign service in the mid 1960s because of his opposition to Australia’s participation in the Vietnam War, Professor Clark pursued a distinguished academic career in Japan.

However as an Australian Government consultant he was also involved in policy making on Australian-Japanese relations in 1974-76.

In his memoirs, Professor Clark recalls how “a piece of phoney information from an incompetent ASIS spy in Tokyo desperate to impress superiors” was used by conservative Canberra bureaucrats to stall trade negotiations with Japan during the Whitlam Labor Government.

“[E]ven when it is clear that the information is unreliable and the spies are out of control, it is hard for anyone to complain or disagree,” he says.